CoreLogic’s June property price results recorded 6.6% annual rental growth, which was the strongest annual increase in rents since February 2009:
Rents growing fast.
Now CoreLogic has released its quarterly rental review, which shows that rental growth is booming across the entire nation, with the exception of Melbourne and Sydney:
Rents booming across most of the nation.
As expected, house rental rises continue to outpace units:
House rental growth steamrolls units.
Whereas rental yields continue to compress as dwelling value rises outpace rental rises:
Yields compression.
According to CoreLogic’s head of research, Eliza Owen:
Australia has not seen rental value increases this high for over a decade. Following subdued rental performance through much of the 2010s, the Australian rental market has seen an increase in values due to many of the same factors that have led to the current housing price upswing. These factors include increased government stimulus through COVID-19, accumulated household savings through lockdown periods, the swift economic recovery seen as restrictions eased, and a lack of rental supply in some markets have also exacerbated rental price increases, particularly in major centres of regional Australia…
In Sydney and Melbourne, unit rents continue to show year on year decline, at -1.1% and -6.4% respectively. As noted in previous quarters, these cities, which have historically had the highest intake of international migrants, have seen rental demand most impacted by international border closures amid the pandemic. Although demand across these unit markets remains fairly subdued, there are signs that rents may be stabilising at lower levels.
Logically, rents should soften next year as the large pipeline of HomeBuilder dwellings begin to hit the market. That said, the fact that rents soared as immigration collapsed is extraordinary and counter intuitive. So expect the unexpected.
